Large financial institutions are largely public entities which means they face quarterly calls with analysts to share news and provide guidance on future financial performance. Some analysts have begun to ask these large FIs how they are harnessing AI to improve efficiencies and gain more market share.  Since these analyst calls are public, it gives us insight as to how large FIs like Bank of America, Citi, Chase, Wells and Regions are adopting GenAI tools across the enterprise.  Shocking News!  They are using it extensively and a growing number are incorporating AI into customer facing experiences.  Which begs the question, at what point is it strategically important for your financial institution to embrace the structured, safe use of GenAI?

According to a recent article in the Financial Brand, which you can access here, the largest U.S. financial institutions are racing to find strategic uses of GenAI.  Perhaps the most forthcoming about their GenAI usage is Bank of America (BofA).  The author of the article highlights the areas in which BofA documented using AI:

• AI Agents – such as its Erica tool. This service has been expanded to business customers and BofA’s internal support staff. The results are a dramatic reduction in phone calls into the support center.
• Search and Summarization – gathering and synthesizing internal and external research with the output providing actional wisdom.
• Content Generation – the “Gen” in GenAI, meaning the ability to create text, images, audio and video. All of which dramatically increase the value of presentations, research and executive summaries.
• Code Generation – Another Gen activity, GenAI writes code very well, given appropriately structed queries. BofA currently employs 17,000 programmers, but they have already saved 10-15% on overall expense related to writing code.
• Intellectual Property – In addition to 1,400 patents, BofA now has over 250 customer GenAI models with each model trained to address a specific element of banking.

Wells Fargo reported that there is a measurable reduction in overall expense due to the deployment of AI tools.  Regions reported that while overall technology spending is increasing by deploying AI services, the bank will not need to add a corresponding number of employees to handle increased growth. For example, Regions has deployed an AI service to search security filings for new business account prospects. Zions Bank is focusing AI on increasing efficiencies and efficacy for compliance tasks. By using AI in the commercial lending process, Zions Bank has directed senior lending staff away from the normalization of customer financial data and instead are focused on increasing revenue and minimizing losses.

It is interesting that all of the examples highlighted above would be just as applicable to a community bank.  If you were to bring together a cross-functional group within your institution and brainstorm the areas where a GenAI tool could increase revenue or reduce expense, you would document all of the examples above plus many more. The question is not whether GenAI could make a dramatic difference for your institution but rather what the future looks like for you if you choose to ignore it altogether.

Nearly all of the examples illustrated above represent internal use of GenAI.  Deploying GenAI in a customer facing application is still deemed risky and my own testing of a customer facing AI Agent indicates that there still is an issue of inaccurate information and hallucinations. One bank that is more proactive in offering a customer facing AI tool is Synchrony Financial. They created a Synchrony Marketplace that allows shoppers using Synchrony’s Marketplace to enter a phrase or theme involving decorating or home furnishings. The AI service presents shoppers with a “handpicked” selection of products matching the information entered, all of which are provided by merchant partners.  This combines the benefit of offering customers a bespoke marketing service while enabling the bank to bring customers to its local merchant account holders. A true win-win.

FNBB is currently underway with a limited deployment of OpenAI’s ChatGPT GenAI service.  We are exploring how the tool can be used to increase internal productivity and ultimately, improve our “Service Beyond Comparison.”  This effort will certainly deliver some lessons learned resulting in my sharing both positive elements of how GenAI is serving FNBB as well as some “lessons learned” that might be helpful as your institution embarks on a GenAI journey. Stay tuned for more examples from our experience throughout the rest of this year.  In the meantime, I covet your notes on how the AI deployment process is going for your institution. Perhaps you are struggling to get the project approved. Maybe you have had some fits and starts in the deployment process or you have a great story to tell about the power of GenAI to dramatically improve internal efficiency or improve the customer experience.  Please reach out to me at dpeterson@bankers-bank.com and share any stories, the good, the bad and the ugly.

Remember to ask GenAI to tell you a banking joke, here is the most recent one from ChatGPT: Why did the banker break up with the calculator?  Because she felt like he was just not adding up anymore — and he couldn’t handle her interest!

The opinions voiced in this material are for general information only and are not intended to provide specific advice, recommendations, or endorsements. No representation is being made as to the material’s accuracy and completeness. Past performance or references are not indicative of future results.